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An Inventory Model with Dependent Product Demands and Returns

30 Pages Posted: 10 Feb 2003  

Gudrun Kiesmüller

Eindhoven University of Technology (TUE) - Faculty of Technology Management

E. van der Laan

Erasmus University Rotterdam (EUR) - Department of Technology and Operations Management; Erasmus Research Institute of Management (ERIM)

Date Written: 27 2001 3,

Abstract

In this paper an inventory model for a single reusable product is investigated,in which the random returns depend explicitly on the demand stream. Further,the model distinguishes itself from most other research in this field by consideringleadtimes and a finite planning horizon. We show that neglecting the dependencybetween demands and returns of products may lead to bad performance with respectto total average relevant costs. Additionally, our results enable us to determine theminimal recovery probability or the minimal length of the planning horizon forwhich reuse is profitable.

Keywords: reusable products, remanufacturing, order-up-to policy, Markov Chain

JEL Classification: M, M11, R4

Suggested Citation

Kiesmüller, Gudrun and van der Laan, E., An Inventory Model with Dependent Product Demands and Returns (27 2001 3,). ERIM Report Series Reference No. ERS-2001-16-LIS. Available at SSRN: https://ssrn.com/abstract=370876

Gudrun Kiesmüller (Contact Author)

Eindhoven University of Technology (TUE) - Faculty of Technology Management ( email )

Erwin A. Van der Laan

Erasmus University Rotterdam (EUR) - Department of Technology and Operations Management ( email )

RSM Erasmus University
PO Box 1738
3000 DR Rotterdam
Netherlands

Erasmus Research Institute of Management (ERIM) ( email )

P.O. Box 1738
3000 DR Rotterdam
Netherlands

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